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A good article for anyone who pays the minimum each month, but likely doesn't impact many on this forum.

I actually find that twenties slip through my fingers more easily than using my card . I've never paid a dime in interest and never intend to, I have a card that pays cash rewards and my Roth is funded in full each Jan.

I started both my kids with credit cards at age 14 . They've been taught that if you don't have money in your account to buy it, you don't charge it, period! Their cards are set up for automaic payment each month. I think of it as a proactive way to teach them money management at an early age when I can show them the rules of the road.

When the oldest earned her first substantial money at age 16, I funded a Roth for her. It was a good segway to discuss compound interest and the advantage of time. I'm matching her earnings right now, but that'll be her responsibility before too long.

Good article, but I do disagree with the quote: "Credit card debt is bad debt."

I would say, "Credit card debt is usually bad debt."

In my case, it's extremely good debt! Yes, I'm one of those who play the 0% arbitrage game. With over a quarter million borrowed at 0% (and plopped in savings earning 5.4%), it's like a second job that pays very, very well.

I don't know how they expect to retire if they're not saving, so there's a real dichotomy between the way people see their future and the way they're handling their money.

Although the article is Canadian, the findings and conclusions likely apply to Americans too.

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"To know what you prefer, instead of humbly saying Amen to what the world tells you you ought to prefer, is to have kept your soul alive". Robert Louis Stevenson, An Inland Voyage (1878)

Good article, but I do disagree with the quote: "Credit card debt is bad debt."

I would say, "Credit card debt is usually bad debt."

In my case, it's extremely good debt! Yes, I'm one of those who play the 0% arbitrage game. With over a quarter million borrowed at 0% (and plopped in savings earning 5.4%), it's like a second job that pays very, very well.

I use to play that game but got burned when I misinterpreted the fine print on when the 0% APR offered expired. I earned about $400 in interest but paid $600 in CC interest a late fees on my $20K. That pretty much wiped out last years profits on CC arbitration.

I am still willing to play the game (just need to be more careful) but I am finding that CC companies have wised up. Now days the "0% interest until next fall on balance transfers" offers carry a 3% transaction fee. After taxes there isn't a lot of benefit to paying 3% to borrow money for 10 months and stick in a 5% MM fund.

I have an Alaskan Airlines Visa Card from Bank of America. In June, DW and I will be flying round trip to Hawaii with a free ticket. This was made possible with points we've accumulated with our purchases. We've never paid any interest with this account, nor do we plan to. We've actually saved a lot of money with the Visa card. Sure, if we'd run a balance and paid interest, we'd have been better paying for all of our purchases in cash and foregoing any free airline tickets. But this is simply not the case in our situation. We pay off our balance each month and absolutely never carry it over.

Plus, if you pay in cash, you would need to be taking that cash out ahead of time and keeping it on hand - lose another week or two on average? Wasted time actually getting the cash?

May not be much, but on top of the rebates, it's 'free money' - why not take it? Credit card gets used for everything that it can.

-ERD50

We also use credit cards for everything, for the same reasons. Also makes tracking spending easier for us. Have to have a little cash for those times when credit cards are not accepted and those expenses never seem to get accounted for.

Only use two cards routinely (Sams Club still requires Discover), but all of our credit cards have a cash back bonus - don't value those airline miles...too many planes and hotels while I was working.

Credit Cards are a convenience IF use prudently. Cash back cards are great. We all know "they" want you to carry a balance, do cash advances, and other stuff to run up the interest - but no one has to do those things. I have a lot of them but only use one or two VISA cards. Very few places will not take them for almost anything. Track charges and payoff every month by on-line transfer from a MMA to VISA. Simple takes all of 15 seconds to pay via computer. I love articles like this they are funny.

Only use two cards routinely (Sams Club still requires Discover), but all of our credit cards have a cash back bonus - don't value those airline miles...too many planes and hotels while I was working.

Don't know if you know this, but Sam's Club recently started taking VISA, after a 2 and a half year "negotiation" on fees.........

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Consult with your own advisor or representative. My thoughts should not be construed as investment advice. Past performance is no guarantee of future results (love that one).......:)

As far as "playing the game" with free CC offers, cash, etc........my life is complex enough without adding stress to it..........maybe when I RE and am bored, I'll look at playing the game.........

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Consult with your own advisor or representative. My thoughts should not be construed as investment advice. Past performance is no guarantee of future results (love that one).......:)

"Whenever you use your credit card, imagine that two and a half times the price of what you are buying will be deducted from your account over the next decade."

This statement really confused me until I realized, duh, that the author assumed one would pay the minimums and carry credit card debt.

It never occurred to me to carry credit card debt. I love my credit cards (2 only)! It's a free float every month with a little cash rebate even. We have always paid it off in full every month for decades. Now that almost everyone accepts cards for just about anything, it's a huge convenience. We use very little cash and almost never write checks.

This statement really confused me until I realized, duh, that the author assumed one would pay the minimums and carry credit card debt.

It never occurred to me to carry credit card debt. I love my credit cards (2 only)! It's a free float every month with a little cash rebate even. We have always paid it off in full every month for decades. Now that almost everyone accepts cards for just about anything, it's a huge convenience. We use very little cash and almost never write checks.

Can't imagine my life without the convenience of credit cards.

You don't need to carry debt to use credit cards!

Audrey

Using a debit card or cash has been strangely liberating for me.....I don't know why.........

Audrey, with your nomad lifestyle, it makes snese to have 1-2 credit cards, and put everything on them......makes your life a lot easier on the road.......

Maybe a happy medium is what I need..........

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Consult with your own advisor or representative. My thoughts should not be construed as investment advice. Past performance is no guarantee of future results (love that one).......:)

Yep! Seeing as how a fuel up runs around $250 or so, dealing with cash would keep me hamstrung.

Debit cards make me nervous.....

We carry two credit cards, a bank VISA and American Express. VISA is used for almost all transactions. Amex for the rare situation that won't take VISA, plus to pay some recurring bills. I quit using our "main" VISA for recurring bills in case the number gets stolen. Has already happened.

One "rare" situation that we ran into needing Amex - Flying J Truck Stops stopped accepting VISA on their trucker diesel fuel pumps. Apparently VISA wanted to charge the customer a few pennies per gallon surcharge and Flying J wouldn't have it.

We keep a third credit card (a different VISA) in our fire safe as a "back up" for if our other VISA has a problem.

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